United States District Court - Northern District Court of California

Claudia Wilken, Chief Judge

Richard W. Wieking, Clerk of Court

Arbitration

Governing rule: ADR Local Rule 4 (.pdf).

Goal:

The purpose of court-sponsored arbitration is to provide parties with an adjudication that is earlier, faster, less formal and less expensive than trial. The award (a proposed judgment) in a non-binding arbitration may either:

  • become the judgment in the case if all parties accept it, or
  • serve as a starting point for settlement discussions

See ADR LR 4-1 (.pdf).

Process:

At the election of the parties, either one arbitrator or a panel of three arbitrators presides at a hearing where the parties present evidence through documents, other exhibits and testimony. The application of the rules of evidence is relaxed somewhat in order to save time and money.

The process includes important, trial-like sources of discipline and creates good opportunities to assess the impact and credibility of key witnesses:

  • parties may use subpoenas to compel witnesses to attend or present documents
  • witnesses testify under oath, through direct and cross-examination
  • the proceedings can be transcribed and testimony could, in some circumstances, be used later at trial for impeachment

Arbitrators apply the law to the facts of the case and issue a non-binding award on the merits. Arbitrators do not “split the difference” and do not conduct mediations or settlement negotiations.

See ADR LR 4-1, 4-10 and 4-11 (.pdf).

Preservation of right to trial:

Either party may reject the non-binding award and request a trial de novo before the assigned judge, who will not know the content of the arbitration award. If no such demand is filed within the prescribed time, the award becomes the final judgment of the court and is not subject to appellate review. There is no penalty for demanding a trial de novo or for failing to obtain a judgment at trial that is more favorable than the arbitration award. Rejecting an arbitration award will not delay the trial date.

Parties may stipulate in advance to waive their right to seek a trial de novo and thereby commit themselves to be bound by the arbitration award. 

See ADR LR 4-1, 4-12 and 4-13 (.pdf).

The neutral:

The court’s ADR staff appoints an arbitrator (or, at the parties’ option, a panel of three arbitrators) with expertise in the substantive legal area of the lawsuit, who is available and has no apparent conflict of interest.  The parties may object to the arbitrator if they perceive a conflict of interest.

All arbitrators on the court’s panel have the following qualifications:

  • admission to the practice of law for at least ten years
  • for at least five years, spent a minimum of 50 percent of professional time litigating or had substantial experience as an ADR neutral
  • training by the court

See ADR LR 2-5 and 4-3 (.pdf).

Attendance:

Insurers of parties are strongly encouraged to attend the arbitration. The following individuals are required to attend:

  • clients with knowledge of the facts
  • the lead trial attorney for each party
  • any witnesses compelled by subpoena

See ADR LR 4-9 (.pdf).

Confidentiality:

The arbitration award is not admissible at a subsequent trial de novo, unless the parties stipulate otherwise. The award itself is sealed upon filing and may not be disclosed to the assigned judge until the court has entered final judgment in the action or the action is otherwise terminated. Recorded communications made during the arbitration may, for limited purposes, be admissible at a trial de novo. See 28 U.S.C. 655(c) (.txt, uscode.house.gov).

See ADR LR 4-11 (.pdf).

Timing:

An arbitration may be requested at any time. The deadline for conducting the arbitration hearing is presumptively 90 days after the order of referral, unless another deadline is fixed by the court. The arbitrator contacts counsel to schedule an initial telephone conference to set the date, time and location of the arbitration hearing and to discuss how to maximize the utility of arbitration.

See ADR LR 4-4 (.pdf).

Written submissions:

The parties exchange and submit written statements to the arbitrator(s) at least 10 days before the arbitration. The statements are not filed with the court.

See ADR LR 4-8 (.pdf).

Appropriate cases/circumstances:

All civil cases in which the parties are represented by counsel are eligible. Cases with the following characteristics may be particularly appropriate for arbitration:

  • only monetary (and not injunctive) relief is sought
  • the complaint alleges personal injury, property damage or breach of contract
  • the amount in controversy is less than $150,000
  • the case turns on credibility of witnesses
  • the case does not present complex or unusual legal issues

See ADR LR 4-2 (.pdf).

Cost:

There is no charge to the litigants.  Arbitrators are paid by the Court $250 per day or portion of each day of hearing in which they serve as a single arbitrator or $150 per day or portion of each day of hearing in which they serve as a member of a panel of three.

 

See ADR LR 4-3 (.pdf).